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Item 7. Management’s Discussion and Analysis

2025-09-19 compared with 2024-09-23 · 185 added, 202 removed, 253 unchanged (60% of the section changed)

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For purposes of this Management ’ s Discussion and Analysis within this Annual Report, all monetary amounts are stated in thousands except for par values and per share amounts, unless otherwise stated.

During the years ended June 30, 2024 (“ Fiscal 2024 ”) and June 30, 2023 (“ Fiscal 2023 ”), Trio-Tech International operated in four segments:

Manufacturing, Testing, Distribution, and Real Estate.

During Fiscal 2024, revenue from the Manufacturing, Testing, Distribution, and Real Estate segments represented 37.9%, 42.4%, 19.6% and 0.1% of our revenue, respectively, as compared to 32.0%, 53.4%, 14.5% and 0.1% respectively, during Fiscal 2023.

Our core business is and historically has been in the semiconductor industry, including manufacturing of test equipment, testing services, and distribution of test and other semiconductor equipment and electronic components.

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We also support our customers as their extended research and development arm in product design, leveraging the expert skills of our component engineers and design engineers.

Revenue from the semiconductor industry, or our Manufacturing, Testing and Distribution segments, accounted for more than 99.9% of our total revenue for the years ended June 30, 2024 and 2023, respectively.

Our Real Estate segment generates rental income and investment income from real estate investments made in Chongqing, China.

No other investment income was recorded as revenue by the Real Estate segment in either Fiscal 2024 or Fiscal 2023.

During the years ended June 30, 2025 (“ Fiscal 2025 ”) and June 30, 2024 (“ Fiscal 2024 ”), Trio-Tech International revenue from Semiconductor Back-end Solutions and Industrial Electronics represented 67.7% and 32.2% of our revenue, respectively, as compared to 71.1% and 28.8% respectively, during Fiscal 2024.

Revenue from the semiconductor industry, or our Semiconductor Back-end Solutions and Industrial Electronics segments, accounted for more than 99.9% of our total revenue for the years ended June 30, 2025 and 2024, respectively.

Fiscal 2025 Highlights

Total revenue decreased by $5,839, or 14%, to $36,473 in Fiscal 2025, as compared to $42,312 in Fiscal 2024.

Manufacturing segment revenue increased by $2,230, or 16.1%, to $16,057 in Fiscal 2024, as compared to $13,827 in Fiscal 2023.

Testing segment revenue was $17,933 in Fiscal 2024, a decrease of $5,197, or 22.5%, as compared to $23,130 in Fiscal 2023.

Distribution segment revenue was $8,297 in Fiscal 2024, an increase of $2,027, or 32.3%, as compared to $6,270 in Fiscal 2023.

Real Estate segment revenue increased by $2 to $25 in Fiscal 2024, as compared to $23 in Fiscal 2023.

SBS segment revenue decreased by $5,429, or 18%, to $24,682 in Fiscal 2025, as compared to $30,111 in Fiscal 2024.

IE segment revenue decreased by $420 or 3% to $11,756 in Fiscal 2025, as compared to $12,176 in Fiscal 2024.

Other segment revenue increased by $10 or 40% to $35 in Fiscal 2025, as compared to $25 in Fiscal 2024.

Overall gross profit margin decreased by 0.3% to 25.1% in Fiscal 2025, as compared to 25.4% in Fiscal 2024.

General and administrative expense was $8,387 in Fiscal 2024 as compared to $8,403 in Fiscal 2023.

Selling expense increased by $174, or 26.0%, to $844 in Fiscal 2024, as compared to $670 in Fiscal 2023.

Profit from operations was $1,093 in Fiscal 2024, a decrease of $1,135, as compared to profit from operations of $2,228 in Fiscal 2023.

Net other income increased by $394 to $500 in Fiscal 2024, as compared to $106 in Fiscal 2023.

Profit from continuing operations before income taxes was $1,629 in Fiscal 2024, a decrease of $753, as compared to profit from continuing operations of $2,382 in Fiscal 2023.

Net profit attributable to TTI for Fiscal 2024 was $1,050, as compared to net profit of $1,544 in Fiscal 2023.

Net profit attributable to non-controlling interest for Fiscal 2024 was $92, as compared to net loss of $214 in Fiscal 2023.

General and administrative expense decreased by $497 or 6% to $7,890 in Fiscal 2025 as compared to $8,387 in Fiscal 2024.

Selling expense decreased by $126, or 15%, to $718 in Fiscal 2025, as compared to $844 in Fiscal 2024.

Income from operations was $254 in Fiscal 2025, reflecting a decline of $839, as compared to income from operations of $1,093 in Fiscal 2024.

Net other expense was $81 in Fiscal 2025, a shift of $617 as compared to net other income of $536 in Fiscal 2024.

Income from continuing operations before income taxes was $173 in Fiscal 2025, reflecting a decline of $1,456 as compared to $1,629 in Fiscal 2024.

Net loss attributable to TTI common shareholders for Fiscal 2025 was $41, as compared to net income of $1,050 in Fiscal 2024.

Net income attributable to non-controlling interest for Fiscal 2025 was $41, as compared to net income of $92 in Fiscal 2024.

Working capital increased by $2,537, or 11.1%, to $25,297 as of June 30, 2025, as compared to $22,760 as of June 30, 2024.

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General Financial Information

Total assets as of June 30, 2024 were $42,540 an increase of $354, or 0.8%, compared to $42,186 as of June 30, 2023.

The increase was primarily due to an increase in cash and cash equivalents, trade accounts receivable and inventories.

The increase was partially offset by short-term deposits, other receivables, prepaid expenses and other current assets, assets held for sale, operating lease right-of-use assets and property, plant and equipment.

Cash and cash equivalents totaled $10,035 as of June 30, 2024, representing an increase of $2,452, or 32.3%, compared to $7,583 as of June 30, 2023.

Cash in banks increased due to a combination of reduced capital expenditures, lower loan repayment obligations and proceeds from exercise of stock options.

Short-term deposits and restricted term deposits as of June 30, 2024 were $9,018, a decrease of $64, or 0.7% compared to $9,082 at June 30, 2023.

Trade account receivables as of June 30, 2024 was $10,661, representing an increase of $857 or 8.7%, compared to $9,804 as of June 30, 2023.

The increase corresponds to the increase in sales in Singapore operations.

Total assets as of June 30, 2025 were $41,068, a decrease of $1,472, or 3.5%, compared to $42,540 as of June 30, 2024.

The decrease was primarily due to an decrease in short term deposits, inventories and operating lease right-of-use assets.

The decrease was partially offset by an increase in cash and cash equivalents, restricted term deposits, trade accounts receivables, other receivables and property, plant and equipment.

Cash and cash equivalents totaled $10,890 as of June 30, 2025, an increase of $855, or 8.5%, compared to $10,035 as of June 30, 2024.

The increase was due to favorable foreign exchange movements as SGD appreciated against USD, which resulted in higher USD equivalent value of Cash and cash equivalents as of June 30, 2025.

The increase in cash and cash equivalents was offset by a decrease of $450, or 5.0% in short-term deposits and restricted term deposits, which as of June 30, 2025 were $8,568, as compared to $9,018 at June 30, 2024.

The decrease in short-term deposits reflects strategic decision to retain a higher proportion of funds in one-month deposits for the purpose of maintaining sufficient liquidity.

Trade account receivables as of June 30, 2025 was $10,804, an increase of $143 or 1.3%, compared to $10,661 as of June 30, 2024.

The increase was due to higher sales in our Industrial Electronics segment's Singapore operations during the fourth fiscal quarter, partially offset by lower sales in our China operations.

The number of days’ sales outstanding in account receivables was 106 days and 90 days for the years ended June 30, 2025 and 2024 respectively.

As of June 30, 2024, other receivables were $541, a decrease of $398, or 42.4%, compared to $939 as of June 30, 2023.

The decrease is mainly due to negotiating better payment terms with creditors, which led to a decrease in advance payments.

Inventories as of June 30, 2024 were $3,162, an increase of $1,011, or 47%, compared to $2,151 as of June 30, 2023.

The increase was mainly due to higher inventory levels in our Singapore operations relating to backlogs that are expected to be delivered over the first two quarters of Fiscal 2025.

Other receivables as of June 30, 2025 were $608, an increase of $67, or 12.4%, compared to $541 as of June 30, 2024.

Other receivables mainly comprise of advance payments to creditors, indirect taxes refundable in Singapore and China operations and interest receivable from short term deposits.

Inventories as of June 30, 2025 were $2,262, a decrease of $900, or 28.5%, compared to $3,162 as of June 30, 2024.

The decrease was driven by order fulfillment in our Singapore operations, along with a reduced backlog, which led to lower inventory levels.

The number of days’ inventory held was 88 days at the end of Fiscal 2025, compared to 96 days at the end of Fiscal 2024.

Prepaid expenses as of June 30, 2024 were $536 as of June 30, 2024 compared to $694 as of June 30, 2023.

This is mainly related to the prepayment for insurance and software license fees.

Investment properties in China as of June 30, 2024 were $407, a decrease of $67 from $474 as of June 30, 2023.

Prepaid expense as of June 30, 2025 were $384 as of June 30, 2025, compared to $536 as of June 30, 2024.

The decrease was due to the amortization of rental expenses of our China operations during Fiscal 2025 relating to advance rental payments made as of June 30, 2024.

Investment properties as of June 30, 2025 were $345, a decrease of $62 or 15.2% from $407 as of June 30, 2024.

The decrease was attributable to the depreciation charged for the year.

Property, plant and equipment as of June 30, 2024 was $5,937, a decrease of $2,407 compared to $8,344 as of June 30, 2023.

The decrease was primarily attributed to the depreciation of leasehold improvements over a shorter lease period and fluctuations in foreign currency exchange rates between June 30, 2023 and June 30, 2024.

Other assets as of June 30, 2024 were $232, an increase of $116, or 100%, compared to $116 as of June 30, 2023.

This increase was primarily due to the increase of long-term deposits.

Property, plant and equipment as of June 30, 2025 was $6,021, an increase of $84 or 1.4% compared to $5,937 as of June 30, 2024.

The increase was primarily attributed to higher capital expenditures and additions to property, plant and equipment, which was partially offset by depreciation of existing property, plant and equipment recorded during Fiscal 2025 between June 30, 2024 and June 30, 2025.

Other assets as of June 30, 2025 were $231, a decrease of $1, or 0.4%, compared to $232 as of June 30, 2024.

Total liabilities as of June 30, 2025 were $7,077, a decrease of $3,885, or 35.4%, compared to $10,962 as of June 30, 2024.

The decrease in liabilities was primarily due to a decrease in accrued expense, contract liabilities, income tax payable, operating leases, bank loans payable and finance lease, partially offset by an increase in accounts payable.

Accounts payable as of June 30, 2024 increased by $1,515, or 91.3% to $3,175 from $1,660 as of June 30, 2023.

This increase aligns with higher inventory levels and ongoing efforts to secure longer payment terms.

Accrued expense as of June 30, 2024 decreased by $659, or 15.4% to $3,634 from $4,293 as of June 30, 2023.

The decrease was mainly due to a decrease in accruals relating to purchases of property, plant and equipments.

Income tax payable as of June 30, 2024 decreased by $153 to $520 from $673 as of June 30, 2023.

The decrease was mainly due to lower taxable profit and also a payment made in connection with repatriation of taxes in Fiscal 2024.

Bank loans payable decreased by $478 to $874 as of June 30, 2024, as compared to $1,352 as of June 30, 2023.

The decrease was due to the repayments made in TTI’s Malaysia operation.

Finance leases decreased by $58 to $91 as of June 30, 2024, as compared to $149 as of June 30, 2023.

The decrease was due to the repayments made in TTI’s Singapore and Malaysia operations partially offset by the addition of finance leases in TTI’s Singapore operation.

Other non-current liabilities decreased by $567 to $27 as of June 30, 2024, as compared to $594 as of June 30, 2023.

The decrease was mainly due to a decrease in accruals relating to acquisition of property, plant and equipment in TTI’s China operations.

Operating lease right-of-use assets and the corresponding lease liabilities decreased by $722 to $1,887 as of June 30, 2024, as compared to $2,609 as of June 30, 2023.

This was due to the repayment made and the operating lease expense charged for the period.

The decrease was partially offset by additional cost and liabilities created by new lease agreements in Malaysia and the renewal of leases in Singapore and China.

The decrease in liabilities was primarily due to a decrease in accounts payable, accrued expense, contract liabilities, income tax payable, bank loans payable, operating and finance lease.

Lines of credit as of June 30, 2025 were $141, an increase of $141, compared to nil as of June 30, 2024.

The increase in the line of credit reflects borrowings to support working capital needs of IE segment in our Singapore operations in Fiscal 2025.

Accounts payable as of June 30, 2025 were $1,896, a decrease of $1,279, or 40.3% from $3,175 as of June 30, 2024.

The decrease reflects efforts to scale down purchases when sales slowed and inventory needs decreased.

Accrued expense as of June 30, 2025 were $3,036, a decrease of $598, or 16.5% from $3,634 as of June 30, 2024.

The decrease was mainly due to reduction in performance linked bonus provisions in Fiscal 2025.

Income tax payable as of June 30, 2025 were $122, a decrease of $398, or 76.5% from $520 as of June 30, 2024.

The decrease was mainly due to lower taxable profit in Fiscal 2025.

Bank loans payable as of June 30, 2025 were $684, a decrease of $190 or 21.7% from $874 as of June 30, 2024.

The decrease was due to the repayments made and no new loan arrangements entered during Fiscal 2025.

Finance leases as of June 30, 2025 were $43, a decrease of $48 or 52.7% as compared to $91 as of June 30, 2024.

The decrease was due to the repayments made in our Singapore and Malaysia operations.

Other non-current liabilities as of June 30, 2025 were $31, an increase of $4 or 14.8% as compared to $27 as of June 30, 2024.

Operating lease right-of-use assets and the corresponding lease liabilities as of June 30, 2025 were $864, a decrease of $1,023 or 54.2% as compared to $1,887 as of June 30, 2024.

This was due to operating lease expense recognized for the period and partially driven by business model restructuring in one of our China operations, which reduced the need for space, resulting in a decrease in operating lease right-of-use assets and the corresponding lease liabilities.

The decrease is partially offset by lease renewals for our Singapore office.

Uncertainties and Remedies

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Conversely, a strengthening of foreign currencies relative to the U.S.

Dollar, while generally beneficial to the Company’s foreign currency denominated sales and earnings, could cause the Company to reduce international pricing, thereby limiting the benefit.

Dollar, which has generally resulted as a result of current U.S.

economic and trade policies, while generally beneficial to the Company’s foreign currency denominated sales and earnings, could cause the Company to reduce international pricing, thereby limiting the benefit.

Additionally, strengthening of foreign currencies may also increase the Company’s cost of product components denominated in those currencies, thus adversely affecting gross margins.

As of June 30, 2024, although we have seen improvements in both our operations and those of our suppliers, we may continue to experience supply shortages as well as inflationary cost pressures in at least the near term.

Risks and uncertainties related to supply chain challenges, and inflationary pressures may continue to negatively impact our revenue and gross margin.

We continue to monitor and evaluate the business impact to react proactively.

The Company maintains monetary assets and liabilities denominated in currencies other than its functional currency.

At each reporting date, these items are remeasured into the functional currency at the period-end spot rate.

Resulting unrealized foreign currency gains or losses are included in net income and reported as reconciling items in the statement of cash flows under the indirect method.

Our operations in Singapore hold certain monetary assets, including U.S.

dollar-denominated accounts receivable and cash balances.

The weakening of the U.S.

dollar against the Singapore dollar resulted in an unrealized foreign currency loss when these U.S.

dollar balances were remeasured into Singapore dollars, which is the functional currency of the subsidiary.

While such impacts affect reported earnings in the period, they are unrealized in nature and may reverse in future periods depending on exchange rate movements and the timing of settlement of these balances.

On August 9, 2022, the CHIPS and Science Act of 2022 (“ CHIPS Act ”) was enacted in the United States.

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As of date, we do not see any direct effect of the CHIPS Act on the Company in the foreseeable future.

We sell our products and services worldwide, and our business is subject to risks inherent in conducting business activities in geographic regions outside of the United States.

Periods of macroeconomic weakness or recession and heightened market volatility caused by adverse geopolitical developments could increase these risks, potentially resulting in adverse impacts on our business operations.

We expect the sales of products for delivery outside of the United States will continue to represent a substantial portion of our future net sales.

Our future performance will depend significantly upon our ability to continue to compete in foreign markets which in turn will depend, in part, upon a continuation of current trade relations between the United States and foreign countries in which semiconductor manufacturers or assemblers have operations.

tariff regime announced in April 2025 could potentially influence downstream demand variability among our customers.

The policy's implementation remains uncertain—while the administration initially paused the tariffs, certain measures are now set to take effect in August 2025, with revised rates for some countries lower than originally proposed.

While we have no direct significant exposure to these tariffs, secondary effects may arise if customers adjust their procurement strategies in response to trade policy changes.

Based on our preliminary observations, demand appears to shift from China to other countries in the region.

However, potential effects on macro demand in the future are far from clear, although we recognize the risk of revenue volatility should global demand continue to weaken due to the continued trade tensions between China and the U.S.

and the potential that such continued trade tensions result in declining economic conditions.

We continue to evaluate capacity adjustments in alignment with observable demand signals while maintaining operational flexibility to adapt to changing market conditions.

As of June 30, 2025, although we have seen improvements in both our operations and those of our suppliers, we may continue to experience supply shortages as well as inflationary cost pressures in at least the near term.

Risks and uncertainties related to supply chain challenges, uncertainty regarding tariffs, and inflationary pressures may continue to negatively impact our revenue and gross margin.

We continue to monitor and evaluate the business impact to react proactively.

Critical Accounting Estimates & Policies

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Inventory Valuation

Inventories of our manufacturing and distribution segments, consisting principally of raw materials, works in progress, and finished goods, are stated at the lower of cost and net realizable value, using the first-in, first-out (“ FIFO ”) method.

Inventories of our SBS and IE segments, consisting principally of raw materials, works in progress, and finished goods, are stated at the lower of cost and net realizable value, using the first-in, first-out (“ FIFO ”) method.

The semiconductor industry is characterized by rapid technological change, short-term customer commitments and swiftly changing demand.

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Maintenance, repairs and minor renewals are charged directly to expense as incurred.

Additions and improvements to property and equipment are capitalized.

Additions and improvements to property, plant and equipment are capitalized.

When assets are disposed of, the related cost and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations and comprehensive income or loss.

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and (5) recognizing revenue when the corresponding performance obligation is satisfied.

Revenue derived from testing services is recognized when testing services are rendered.

Revenue generated from sale of products in the manufacturing and distribution segments are recognized when persuasive evidence of an arrangement exists, delivery of the products has occurred, customer acceptance has been obtained (which means the control has been transferred to the customer), the price is fixed or determinable and collectability is reasonably assured.

Certain customers can request for installation and training services to be performed for certain products sold in the manufacturing segment.

Revenue derived from testing services in SBS and IE segment is recognized when services are rendered.

Revenue generated from sale of products for both SBS and IE segments are recognized when persuasive evidence of an arrangement exists, delivery of the products has occurred, customer acceptance has been obtained (which means the control has been transferred to the customer), the price is fixed or determinable and collectability is reasonably assured.

Certain customers can request for installation and training services to be performed for certain equipment sold in SBS and IE segment.

These services are mainly for helping customers with the test runs of the machines sold and are considered a separate performance obligation.

Such services can be provided by other entities as well, and these do not significantly modify the product.

The Company recognizes the revenue at the point in time when the Company has satisfied its performance obligation.

In the real estate segment:

(1) revenue from property development is earned and recognized on the earlier of the dates when the underlying property is sold or upon the maturity of the agreement;

if this amount is uncollectible, the agreement empowers the repossession of the property, and (2) rental revenue is recognized on a straight-line basis over the terms of the respective leases.

This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognized for the period.

Straight-line rental revenue is commenced when the tenant assumes possession of the leased premises.

Accrued straight-line rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements.

The Company recognizes the revenue at the point in time when the Company has satisfied its performance obligations.

The Company (a) evaluates the sufficiency of the total equity at risk, (b) reviews the voting rights and decision-making authority of the equity investment holders as a group, and whether there are any guaranteed returns, protection against losses, or capping of residual returns within the group and (c) establishes whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making a Variable Interest Entity (“ VIE ”) determination.

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Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting.

Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or consolidated statements of operations and comprehensive income or loss.

Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheets or consolidated statements of operations and comprehensive income or loss.

However, impairment charges are recognized in the consolidated statements of operations and comprehensive income or loss.

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Factors considered important that could result in an impairment review include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for our business, significant negative industry or economic trends, and a significant decline in our stock price for a sustained period of time.

Impairment is recognized based on the difference between the fair value of the asset and its carrying value, and fair value is generally measured based on discounted cash flow analysis, if there is significant adverse change.

We have not identified any changes in circumstances requiring further impairment test in Fiscal 2024 except the phasing out of burn-in service contract with a customer in our Malaysia operation.

In June 2023, our Malaysia operation received notification of termination of contract from a customer effective January 2024.

In consideration of this impairment indicator, Management performed a further impairment test, and determined that majority of the primary assets used for servicing this customer in Malaysia had either fully depreciated before contract termination or repurposed for other customers.

As the fair value of the primary assets were higher than the carrying value and hence, no impairment charges have been recorded in the year ended June 30, 2024.

Impairment is recognized based on the difference between the fair value of the asset and its carrying value, and fair value is generally measured based on undiscounted cash flow analysis, if there is significant adverse change.

We have not identified any changes in circumstances requiring further impairment test in Fiscal 2025.

Our assessments established that the fair value of our primary assets continued to exceed their carrying amounts, resulting in no impairment charges for Fiscal 2025.

We will continue to monitor impairment indicators, such as disposition activity, stock price declines or changes in forecasted cash flows in future periods.

If the fair value of our reporting unit declines below the carrying value in the future, we may incur additional impairment charges.

If the fair value of our reporting unit declines below the carrying value in the future, we will perform impairment testing and recognize impairment charges accordingly.

Fair Value Measurements

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Management believed it was more likely than not that the future benefits from these timing differences would not be realized.

Accordingly, a valuation allowance was provided as of June 30, 2024 and 2023.

Accordin gly, a valuation allowance was provided as of June 30, 2025 and 2024.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations.

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Interest Income

Interest income on loans is recognized on an accrual basis.

Interest income on bank deposits and loans is recognized on an accrual basis.

Discounts and premiums on loans are amortized to income using the interest method over the remaining period to contractual maturity.

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Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures.

The new guidance requires enhanced disclosures about significant segment expense.

This standard update is effective for the Company for annual periods beginning in the fiscal year ending June 30, 2025 and interim period reports beginning in the first quarter of the fiscal year ending June 30, 2026.

Early adoption is permitted on a retrospective basis.

The Company is currently evaluating the impact of this ASU on segment disclosure.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) , Improvements to Income Tax Disclosures .

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The Company is currently evaluating the impact of this ASU on annual income tax disclosures.

Other new pronouncements issued but not yet effective until after June 30, 2024 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The new guidance requires improved disclosures about Company’s expenses.

This standard update is effective for the Company for annual periods beginning in the fiscal year ending June 30, 2027 and interim period reports beginning in the first quarter of the fiscal year ending June 30, 2027.

Early adoption is permitted on a retrospective basis.

The Company is currently evaluating the impact of this ASU on expense disclosures.

Other new pronouncements issued but not yet effective until after

June 30, 2025 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

Comparison of Operating Results

The following table presents certain data from the consolidated statements of operating income as a percentage of net sales for Fiscal 2024 and 2023:

The following table presents certain data from the consolidated statements of operations and comprehensive income as a percentage of net sales for Fiscal 2025 and 2024:

For the Year Ended June 30,

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Research and development

Loss on disposal of property, plant and equipment

(Gain) / Loss on disposal of property, plant and equipment

Total operating expense

Income from Operations

Revenue is comprised of revenue from the Manufacturing, Testing, Distribution and Real Estate segments.

Revenue comprises of mainly revenue from the SBS and IE segments.

The components of revenue for Fiscal 2025 and 2024 were as follows:

For the Year Ended June 30,

Manufacturing

Semiconductor Back-end Solutions (SBS)

Industrial Electronics (IE)

Revenue during Fiscal 2025 was $36,473, a decrease of $5,839, or 14%, compared to $42,312 during Fiscal 2024.

The decrease in revenue was primarily due to the decrease in sales from the Testing segment that reflects a drop in volume amidst a challenging semiconductor market environment.

Manufacturing Segment

Manufacturing segment accounted for 37.9% of revenue during Fiscal 2024, an increase of 5.9%, compared to 32.0% during Fiscal 2023.

Revenue generated by the Manufacturing segment during Fiscal 2024 was $16,057, reflecting an increase of $2,230, or 16.1%, compared to $13,827 during Fiscal 2023.

As of June 30, 2024, the backlog in the Manufacturing segment was $5,944, reflecting a decrease of $2,112 from $8,056 as of June 30, 2023.

This decline is primarily due to a slowdown in budgeted capital spending by customers.

The customers' capital spending is likely to slow down over the next two quarters, with a potential improvement thereafter.

Testing Segment

Revenue generated by the Testing segment accounted for 42.4% of total revenue during Fiscal 2024, as compared to 53.4% during Fiscal 2023.

Revenue generated by the Testing segment for Fiscal 2024 was $17,933, reflecting a decrease of $5,197, or 22.5%, compared to $23,130 for Fiscal 2023.

The decrease in revenue in the Testing segment reflects the drop in volume amidst a challenging semiconductor market environment.

Backlog in the Testing segment as of June 30, 2024 was $5,342, a decrease of $60, compared to $5,402 at June 30, 2023.

Backlog is dependent on the estimated volume provided by customers, which is dependent on the customers’ inventory levels and demand.

Distribution Segment

Revenue generated by the Distribution segment during Fiscal 2024 accounted for 19.6% of total revenue, an increase of 5.1% compared to 14.5% for Fiscal 2023.

Revenue for Fiscal 2024 was $8,297, an increase of $2,027, or 32.3%, compared to $6,270 for Fiscal 2023.

In Fiscal 2023, customer demand was lower due to excess inventory levels.

However, in Fiscal 2024, demand for electronic components has recovered.

Backlog in the Distribution segment as of June 30, 2024 was $3,068, reflecting a decrease of $814 compared to the backlog of $3,882 at June 30, 2023.

The decrease in backlog was mainly due to weaker demand from customers.

Display and electronic component sales are very competitive, as the products are readily available in the market.

We believe that our competitive advantage in the distribution segment is that we act as value-added provider by enhancing the value of the distributed products by customizing them to the needs of our customers through our expert design, engineering and integration.

Even with a weak backlog, we see the potential to perform better in fiscal year 2025 than in fiscal year 2024.

Real Estate Segment

Revenue generated by the Real Estate segment was 0.1% of total revenue for both the years ended June 30, 2024 and 2023.

Revenue generated by the Real Estate segment for Fiscal 2024 was $25, as compared to $23 for Fiscal 2023.

Backlog in the Real Estate segment as of June 30, 2024, was $68, a decrease of $29 as compared to $97 at June 30, 2023.

The decrease is mainly due to low occupancy rate in the Fu Li Real Estate Development Co.

The decrease in revenue was primarily due to the decrease in sales from Testing services in the SBS segment amidst a challenging semiconductor market environment.

Semiconductor Back-end Solutions (SBS)

SBS segment accounted for 67.7% of revenue during Fiscal 2025, a decrease of 3.4% compared to 71.1% during Fiscal 2024.

Revenue generated by the SBS segment during Fiscal 2025 was $24,682, reflecting a decrease of $5,429, or 18%, compared to $30,111 during Fiscal 2024.

Persistent challenges in China operations, where revenue declines reflect both cyclical industry headwinds and lasting trade tension effects, continue to weigh on our SBS segment performance.

Although the recovering demand in Malaysia and Thailand operations provided partial mitigation through Fiscal 2025, this has not yet fully offset China's shortfall.

Notably, Singapore operations provided additional mitigation, with stronger fourth-quarter performance relative to earlier quarters of Fiscal 2025, to reduce the year-on-year revenue decline.

While these are encouraging signs of recoveries from an industry cyclical downturn, we will continue to assess conditions with prudent optimism, balancing the sector's strong growth drivers with prudent risk management to navigate potential volatility.

As of June 30, 2025 , the backlog in the SBS segment was $6,695, reflecting a decrease of $3,170 from $9,865 a s of June 30, 2024.

The decline in the SBS segment backlog was driven by cyclical industry headwinds and prolonged trade tensions.

Industrial Electronics (IE)

Revenue generated by the IE segment accounted for 32.2% of total revenue during Fiscal 2025, an increase of 3.4% compared to 28.8% during Fiscal 2024.

The Industrial Equipment (IE) segment experienced a rebound in revenue during the fourth quarter of Fiscal 2025, mitigating the year-over-year revenue decline.

On a year-on-year basis, IE segment revenue for Fiscal 2025 was $11,756, reflecting a decrease of $420, or 3%, compared to $12,176 for Fiscal 2024, which was a meaningful improvement from the earlier quarters.

This improvement was partly driven by the fulfilment of deferred orders from prior quarters, which had been delayed due to supply chain disruptions from principal suppliers and timing-related shifts in customer demand.

In Fiscal 2025, the Company mitigated revenue volatility through service portfolio diversification and expanded into a new distribution channel for aviation products and projects, offsetting softer demand in existing markets.

Our ability to deliver customized, value-added solutions has enabled us to capitalize on new partnership opportunities while strengthening market penetration for our proprietary product lines, including Highly Accelerated Stress Test (HAST) systems, bubble testers, centrifuges, and Artic systems.

These strategic initiatives underscore our commitment to long-term growth and adaptability amid evolving market conditions.

Backlog in the IE segment as of June 30, 2025 was $4,335, a decrease of $154, compared to $4,489 at June 30, 2024.

The decline of backlog mainly attributable in equipment sales, driven by adverse macroeconomic conditions, was partially offset by an increase in backlog of component sales.

The equipment and electronic components market is highly competitive, with commoditized products widely available.

Our differentiation lies in our value-added distribution model, with enhancement of standard products through customized design, engineering, integration, and sub-assembly services tailored to customer specifications, securing a competitive advantage for the long term.

Gross margin as a percentage of revenue was 25.1% in Fiscal 2025, a decrease of 0.3% compared to 25.4% in Fiscal 2024.

Overall gross profit for Fiscal 2025 was $9,144, a decrease of $1,618, or 15%, compared to $10,762 for Fiscal 2024.

The decrease in gross margin as a percentage of revenue was mainly attributable to the underperformance in the Testing segment.

Gross margin as a percentage of revenue in the Manufacturing segment was 26.4% in Fiscal 2024, an increase of 3%, compared to 23.4% in Fiscal 2023.

Gross profit for the Manufacturing segment in Fiscal 2024 was $4,234, an increase of $994 or 30.7%, compared to $3,240 in Fiscal 2023.

The increase in gross profit was primarily due to an increase in system and equipment sales that generates higher margins in Fiscal 2024 compared to Fiscal 2023.

Gross margin as a percentage of revenue in the Testing segment was 28.6% in Fiscal 2024, a decrease of 3.7%, compared to 32.3% in Fiscal 2023.

Gross profit in the Testing segment in Fiscal 2024 was $5,124, a decrease of $2,348, or 31.4%, compared to $7,472 in Fiscal 2023 due to lower margins in the Testing segment resulting from lower demand.

The gross margin was negatively impacted by the decrease in revenue across all test operations where a significant portion of our cost of goods sold are fixed, and as the demand for services and factory utilization decrease, the fixed costs are spread over the decreased output, which reduces the gross profit margin.

Gross margin as a percentage of revenue in the Distribution segment was 17.5% in Fiscal 2024, an increase of 0.9%, compared to 16.6% in Fiscal 2023.

Gross profit in the Distribution segment was $1,450, an increase of $408, or 39.2%, compared to $1,042 in Fiscal 2023.

The increase in gross profit was due to the increase in distribution sales compared to the Fiscal 2023.

Gross loss in the Real Estate segment was $46 in Fiscal 2024, a decrease of $3 as compared to $49 in Fiscal 2023.

Gross margin as a percentage of revenue in the SBS segment was 27.4% in Fiscal 2025, a decrease of 0.5%, compared to 27.9% in Fiscal 2024.

Despite the revenue contraction, gross profit margin demonstrated relative stability, primarily attributable to reduced cost of sales following the completion of asset depreciation cycles in our China operations during the first half of Fiscal 2025.

Moving forward, the Company will maintain its focus on cost control initiatives to navigate the ongoing challenging demand environment.

Gross profit for the SBS segment in Fiscal 2025 was $6,764, a decrease of $1,623 or 19.4%, compared to $8,387 in Fiscal 2024.

The decrease in absolute dollar of gross profit is attributed to the decline in revenue.

Gross margin as a percentage of revenue in the IE segment was 20.5% in Fiscal 2025, an increase of 0.5%, compared to 20.0% in Fiscal 2024.

The IE segment's gross margin improvement resulted from a strategic shift toward higher-margin equipment sales, where a more favorable sales composition led to lower direct material costs and thereby reducing cost of sales during Fiscal 2025 as compared to Fiscal 2024 .

Gross profit in the IE segment in Fiscal 2025 was $2,413 , a decrease of $18 , or 1% , compared to $2,431 in Fiscal 2024 .

Operating Expense

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Research and development

Loss on disposal of property, plant and equipment

General and administrative expense was $8,387 in Fiscal 2024, remaining nearly unchanged from $8,403 in Fiscal 2023.

During Fiscal 2024, we incurred professional fees of approximately $307 related to the identification and evaluation of potential divestment opportunities.

These fees were primarily associated with advisory services aimed at optimizing our portfolio and aligning our strategic focus.

While these costs impacted our operating expense for the year, they are considered non-recurring and directly linked to our ongoing efforts to streamline operations and enhance shareholder value.

Excluding these expenses, total general and administrative expense was lower on a trailing twelve-month basis, reflecting our rigorous cost-saving efforts across our organization.

Selling expense increased by $174, or 26%, to $844 in Fiscal 2024, compared to $670 in Fiscal 2023.

The increase in selling expense was primarily attributable to an increase in commission because of an increase in commissionable revenue and increased business travel in Fiscal 2024 as compared to Fiscal 2023.

Profit from Operations

Profit from operations was $1,093 in Fiscal 2024, a decrease of $1,135, compared to profit from operations of $2,228 in Fiscal 2023.

The decrease was mainly due to the decrease in revenue, coupled with a decrease in gross profit margin in the Testing segment.

(Gain) / Loss on disposal of property, plant and equipment

General and administrative expense was $7,890 in Fiscal 2025, a decrease of $497 or 6% from $8,387 in Fiscal 2024.

The decrease in general and administrative expense was primarily driven by lower performance-related manpower costs across the Company, complemented by the continued execution of cost control initiatives in our China operations to enhance operational efficiency and optimize resource utilization.

Selling expense was $718 in Fiscal 2025, a decrease of $126 or 15% compared to $844 in Fiscal 2024.

The decrease in selling expense was primarily attributable to lower commission payments because of a decrease in commissionable revenue in Fiscal 2025 as compared to Fiscal 2024.

Income from Operations

Income from operations was $254 in Fiscal 2025, a decrease of $839, compared to income from operations of $1,093 in Fiscal 2024.

The decline was mainly due to the decrease in revenue in absolute dollar amounts.

Interest Expense

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Interest expense

Interest expense decreased by $28 to $77 in Fiscal 2024, compared to $105 in Fiscal 2023 due to lower utilization of credit facilities.

Interest expense was $45 in Fiscal 2025, a decrease of $32 compared to $77 in Fiscal 2024 due to lower utilization of credit facilities and a reduction in outstanding loans over the period.

The bank loans payable decreased by $190 to $684 in Fiscal 2025, as compared to $874 in Fiscal 2024 due to payments made.

Other income for the years ended June 30, 2024 and 2023 was as follows:

Other (Expense) / Income

Other (expense) / income for the years ended June 30, 2025 and 2024 was as follows:

For the Year Ended June 30,

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Other miscellaneous income

Other income increased by $394 to $500 for Fiscal 2024, compared to $106 for Fiscal 2023.

The increase was mainly due to an increase in interest income and a favorable foreign currency impact.

During Fiscal 2025, the Company recorded other expense of $181, representing an unfavorable shift of $681 compared to other income of $500 in Fiscal 2024.

This variance was primarily driven by foreign exchange losses, both realized and unrealized.

During the second half of Fiscal 2025, the U.S.

dollar weakened significantly against the Singapore dollar with the exchange rate fluctuating between approximately 1.35 to 1.28 Singapore dollar between January and June 2025.

Given that our Singapore operations represent the Company's largest revenue contributor, this currency movement resulted in substantial foreign exchange losses, both from U.S.

dollar denominated sales where customers payments were converted into Singapore dollar at lower rates (realized exchange losses) and outstanding U.S.

dollar denominated monetary items in our balance sheet (unrealized exchange losses).

Government Grant

During Fiscal 2024, the Company received government grants amounting to $113, $23 of which was financial assistance received from the Singapore government, $57 from the U.S.

During Fiscal 2025, the Company received government grants amounting to $145, $82 of which was an incentive from the Singapore government for local resident recruitment, $48 from the U.S.

government related to Employee Retention Credit (“ ERC ”) and the remaining $15 related to capital expenditure subsidy received from the government in China.

During Fiscal 2023, the Company received government grants amounting to $153, $107 of which was financial assistance received from the Singapore government and the remaining related to capital expenditure subsidy received from the government in China.

During Fiscal 2024, the Company received government grants amounting to $113, $23 of which was financial assistance received from the Singapore government for local resident recruitment, $57 from the U.S.

government related to ERC and the remaining related to capital expenditure subsidy received from the government in China.

Income Tax Expense

13 unchanged sentences

As of June 30, 2025, the Company held a 55% interest in each of Trio-Tech (Malaysia) Sdn.

Bhd., Trio-Tech (Kuala Lumpur) Sdn.

Bhd., and SHI International Pte Ltd, a 52% interest in PT SHI Indonesia, a 76% interest in Prestal Enterprise Sdn.

and a 51% interest in Trio-Tech Jiangsu Co., Ltd.

The non-controlling interest for Fiscal 2024, in the net profit of subsidiaries, was $92, a change of $122 compared to a non-controlling interest in the net profit of $214 for the previous fiscal year.

The change in the non-controlling interest was primarily attributable to the decrease in net income generated by the Company’s operations in China.

Net Income Attributable to Trio-Tech International Common Shareholders

Net income attributable to Trio-Tech International common shareholders for Fiscal 2024 was $1,050 compared to the net income attributable to Trio-Tech International common shareholders of $1,544 for Fiscal 2023.

The decrease was mainly due to the decrease in revenue and gross margin, partially offset by an increase in other income.

Earnings per Share

Basic earnings per share from continuing operations was $0.25 in Fiscal 2024, as compared to basic earnings per share of $0.38 in Fiscal 2023.

Bhd., SHI International Pte Ltd, and 52% interest in PT SHI Indonesia.

We also held a 76% interest in Prestal Enterprise Sdn.

The share of non-controlling interest for Fiscal 2025, in the net income of subsidiaries, was $41, a decrease of $51 compared to a non-controlling interest in the net income of $92 for the previous fiscal year, due to the decrease in net income generated by the Company's China operations during Fiscal 2025 before the Company's acquisition of the remaining 49% of the equity interest in Trio-Tech (Jiangsu) Co.

Ltd, resulting in the acquisition of all the equity interest in Trio-Tech (Jiangsu) Co.

Ltd as of June 30, 2025.

Net (Loss) / Income Attributable to Trio-Tech International Common Shareholders

Net loss attributable to Trio-Tech International common shareholders for Fiscal 2025 was $41 compared to the net income attributable to Trio-Tech International common shareholders of $1,050 for Fiscal 2024 .

The decline was mainly due to the decrease in revenue and gross margin in absolute dollar amounts, which was further exacerbated by exchange losses due to unfavorable foreign currency movements.

(Loss) / Earnings per Share

Basic loss per share from continuing operations was $0.01 in Fiscal 2025 , as compared to basic earnings per share of $0.25 in Fiscal 2024 .

Basic earnings per share from discontinued operations was $nil for Fiscal 2025 and Fiscal 2024 .

Diluted earnings per share from continuing operations was $0.24 in Fiscal 2024, as compared to diluted earnings per share $0.37 in Fiscal 2023.

Diluted loss per share from continuing operations was $0.01 in Fiscal 2025 , as compared to diluted earnings per share $0.24 in Fiscal 2024 .

Diluted earnings per share from discontinued operations was $nil for Fiscal 2025 and Fiscal 2024 .

2 unchanged sentences

As the segment revenue and gross margin for each segment has been discussed in previous sections, only the comparison of income/(loss) from operations is discussed below.

Manufacturing Segment

The revenue, gross margin and income/(loss) from operations for the Manufacturing segment for the years ended June 30, 2024 and 2023 were as follows:

For the Year Ended June 30,

Income / (Loss) from operations

Income from operations in the Manufacturing segment was $616 in Fiscal 2024, an increase of $674, as compared to a loss from operations of $58 in Fiscal 2023.

The increase in net income was attributable to an increase in gross margin of $1,007 partially offset by the increase in operating expense of $384.

Operating expense was $3,618 and $3,298 for Fiscal 2024 and 2023, respectively.

The increase in operating expense was mainly attributable to higher remuneration expense due to improved performance, business travel and entertainment expenses, and an increased allocation of corporate expense.

Testing Segment

The revenue, gross margin and income from operations for the Testing segment for the years ended June 30, 2024 and 2023 were as follows:

Semiconductor Back-end Solutions (SBS)

The revenue, gross margin and income from operations for the SBS segment for the years ended June 30, 2025 and 2024 were as follows:

For the Year Ended June 30,

(Loss) / Income from operations

Loss from operations in the Testing segment in Fiscal 2024 was $322, as compared to income from operations of $1,648 in Fiscal 2023.

The decrease in operating profit was mainly due to lower gross profit resulting from lower revenue.

Income from operations

Income from operations in the SBS segment was $411 in Fiscal 2025, a decrease of $684, as compared to an income from operations of $1,095 in Fiscal 2024.

The decrease in income from operations was mainly due to a decrease in revenue in absolute dollar amounts.

Operating expense was $6,353 and $7,292 for Fiscal 2025 and 2024, respectively.

The decrease of $378 in operating expense was mainly due to effective cost control measures implemented across Test operations in response to drop in volume, coupled with lower corporate expenses allocated to the Testing segment due to drop in revenue.

Distribution Segment

The revenue, gross margin and income from operations for the Distribution segment for the years ended June 30, 2024 and 2023 were as follows:

The decrease in operating expense was mainly due t o lower performance based remunerations for Fiscal 2025 as compared to Fiscal 2024 .

Industrial Electronics (IE)

The revenue, gross margin and income from operations for the IE segment for the years ended June 30, 2025 and 2024 were as follows:

For the Year Ended June 30,

Income from operations

Income from operations in the Distribution segment was $1,129 in Fiscal 2024, as compared to $816 in Fiscal 2023.

The increase in operating income was primarily due to an increase in gross margin by $408, which was partially offset with an increase in operating expense of $97.

Operating expense was $321 and $224 for the years ended June 30, 2024 and 2023, respectively.

The increase in operating expense was mainly contributed by business travel and entertainment expenses, and an increased allocation of corporate expenses.

Real Estate Segment

The revenue, gross margin and loss from operations for the Real Estate segment for the years ended June 30, 2024 and 2023 were as follows:

For the Year Ended June 30,

Loss from operations

Loss from operations in the Real Estate segment was $100 in Fiscal 2024, as compared to $98 in Fiscal 2023.

Operating expense was $54 and $49 in each of the years ended June 30, 2024 and 2023 respectively.

Income from operations in the IE segment in Fiscal 2025 was $236, as compared to income from operations of $509 in Fiscal 2024.

The decrease in income from operations was mainly due to a decrease in revenue in absolute dollar amounts.

Operating expense was $2,177 and $1,922 for Fiscal 2025 and 2024, respectively.

The increase of $255 in operating expense was drive n by higher travel costs from the pursuit of new business opportunities to expand into new markets, along with higher selling and distribution expenses from more agency commission payments, tied to higher proportion of commissionable revenue in the IE segment .

The loss from operations for corporate for the years ended June 30, 2025 and 2024, respectively:

1 unchanged sentence

Loss from operations

In Fiscal 2024, corporate operating loss was $230, a change of $150, compared to loss of operations of $80 in Fiscal 2023.

During Fiscal 2024, the operating loss increased due to $307 in professional fees associated with advisory services aimed at optimizing our portfolio and aligning our strategic focus.

In Fiscal 2025, corporate operating loss was $393, as compared to $511 in Fiscal 2024.

During Fiscal 2024, there was a one-off $307 incurred for professional fees associated with advisory services aimed at optimizing our portfolio and aligning our strategic focus.

Net cash provided by operating activities was $371 for the year ended June 30, 2025, a decrease of $2,346 as compared to $2,717 provided by operating activities for the prior year.

The decrease in net cash provided by operating activities was primarily due to decrease in depreciation and amortization of $854, trade receivables receipts of $2,650, inventories of $1,276, contract liabilities of $810, and other non-current liabilities of $1,133 partially offset by an increase in cash inflow from accounts payable and accrued expense of $1,896.

Net cash used in investing activities was $113 for the year ended June 30, 2024, a decrease of $5,961 as compared to $6,074 used in investing activities in the prior year.

The decrease in net cash used in investing activities was primarily due to a decrease in outflow of $2,167 used for investments in unrestricted deposits and $3,956 used on additional property, plant and equipment.

Net cash used in financing activities for the year ended June 30, 2024, was $90, compared to $1,243 used during the prior year.

The decrease in cash outflow for financing activities was mainly due to settlement of lines of credit of $541 relating to the prior year.

In Fiscal 2024, lines of credit of $961 were availed and were settled within the same period.

Proceeds from exercising stock options during that period amounted to $506, which was a $437 increase as compared to the same period in Fiscal 2023.

The decrease in net cash provided by operating activities was primary due to lower net income of $1,142 in Fiscal 2025 compared to Fiscal 2024, partially offset by decrease in inventory.

Higher payments to trade creditors by $2,661 further contributed to the decrease in net cash provided by operating activities.

Net cash provided by investing activities was $167 for the year ended June 30, 2025, an increase of $280 as compared to $113 net cash used in investing activities for the prior year.

The increase was primarily due to higher withdrawals from unrestricted deposits which was held for working capital purposes and also higher cash outflow for addition to property, plant and equipment amounting to $425.

The decrease in cash usage in financing activities was mainly because the net cash outflow for lines of credit and bank loans amounted to $146 in Fiscal 2025, which was lower by $338 compared to $484 in Fiscal 2024.

Cash generated from the proceeds from the exercise of stock options in Fiscal 2024 was $341 higher than Fiscal 2025.

We believe that our projected cash flows from operations, borrowing availability under our revolving lines of credit, cash on hand, trade credit and the secured bank loans will provide the necessary financial resources to meet our projected cash requirements for at least the next 12 months.

The Company filed a Shelf Registration Statement on Form S-3 on December 3, 2021, under which we may raise capital of $10,000,000 from any combination of securities (common stock, warrants, debt securities or units) for business expansion and working capital purposes if necessary.

Capital Resources

2 unchanged sentences

Working capital was $25,297 as of June 30, 2025, representing an increase of $2,537, or 11.1%, compared to working capital of $22,760 as of June 30, 2024.

The increase in working capital was mainly due to increases in current assets, including cash and cash equivalents, trade receivables and inventories, and decreases in current liabilities, including accrued expense, contract liabilities, income taxes payable, bank loans payable, finance leases, and operating leases.

Such fluctuations were partially offset by decreases in current assets, including short-term deposits, other accounts receivable, prepaid expenses and assets held for sale and increases in current liabilities, including accounts payable.

Th e increase i n working capital was mainly due to decreases in current liabilities, including accounts payable, accrued expense, contract liabilities, income taxes payable and operating leases.

Such fluctuations were partially offset by decreases in current assets, including short-term deposits and prepaid expenses and increases in current liabilities, including lines of credit.

The majority of our capital expenditures are based on demands from our customers, as we are operating in a capital-intensive industry.

Our capital expenditures were $542 and $4,498 for the years ended June 30, 2024 and 2023, respectively.

The capital expenditures in Fiscal 2024 were primarily for motor vehicles and equipment.

We financed our capital expenditures and other operating expense through operating cash flows and long-term debts.

Our capital expenditures were $967 an d $542 for the years ended June 30, 2025 and 2024, respectively.

The capital expenditures in Fiscal 2025 were primarily for machinery & equipment in Singapore, Malaysia and Thailand operations and leasehold improvement in China and Singapore operations .

We financed our capital expenditures and other operating expense through operating cash flows.

Our credit rating provides us with ready and adequate access to funds in the global market.

At June 30, 2024, the Company had certain lines of credit that are collateralized by restricted deposits.

As of June 30, 2025, the Company had certain lines of credit that are collateralized by restricted deposits.

Trio-Tech International Pte.

10 unchanged sentences

Lines of Credit

Cost of Funds Rate +1.25% to +1.3%

Cost of Funds Rate +1.25%

Universal (Far East) Pte.

Lines of Credit

Cost of Funds Rate +1.25% to +1.3%

Cost of Funds Rate +1.25%

Trio-Tech Malaysia Sdn.

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis